ACIT,Cen.Cir.2(2), Pune, Pune V. Bharati Kala Acadamy, Pune

ITA 319/PUN/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56516 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 17-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K AMBASHTA
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBE R AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.319/PN/2010 (ASSESSMENT YEAR: 2006-07) ZAL SAM COOPER .. APPELLANT C/O COOPER CORPORATION PVT.LTD., L-3, ADDL. MIDC, SATARA 415 004. PAN ABAPC1125D VS. A.C.I.T. SATARA CIRCLE, SATARA .. RESPONDENT APPELLANT BY: SHRI C.H.NANIW ADEKAR, AR RESPONDENT BY: SHRI S.K.AMBA SHTA, DR ORDER PER D.KARUNAKARA RAO, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (A)-III, PUNE DATED 16/1 1/2009 FOR THE ASSESSMENT YEAR 2006-07 IN CONNECTION WITH THE SET OFF OF THE UNABSORBED DEPRECIATION AGAINST THE INCOME TAXABLE UNDER THE H EAD SALARY INVOKING OF THE PROVISIONS OF SECTION 154 OF THE ACT. 2. IN THE IMPUGNED ORDER, CIT(A) DISMISSED THE ASS ESSEES APPEAL HOLDING THAT THE UNABSORBED DEPRECIATION CANNOT BE SET OFF AGAINST T HE INCOME COMPUTED UNDER THE HEAD SALARY . FOR THIS PROPOSITION, THE CIT(A) RELIED UPON THE EXPRESS PROVISIONS OF SUB-SE CTION (2A) OF 71 OF THE ACT WHICH WERE INSERTED BY THE FINANCE ACT 2004 W.E.F. 01/04/2005. 3. DURING THE PROCEEDING BEFORE US, BOTH THE PARTIE S MENTIONED THAT THIS ISSUE STANDS COVERED BY THE ORDER OF THE TRIBUNAL O F CHENNAI BENCH IN THE CASE OF CHANDRAKUMAR 129 TTJ (CHENNAI) 489. AFTER HEARING OF PARTIES, WE PERUSED THE SAID ORDER OF THE TRIBUNAL AND FACTS OF THIS CASE. IN THE INSTANT CASE, THERE IS UNDISPUTEDLY AN UNOBSERVED DEPRECIATION WHICH IS COMPUTED UNDER THE HEAD OF PROFITS AND GAINS FROM BUSINESS AND PROFESSION . ASSESSEE IS OF THE OPINION THAT SUCH AN UNABSOR BED DEPRECIATION IS ELIGIBLE FOR SET OFF AGAINST THE AS SESSEES INCOME TAXABLE UNDER THE HEAD SALARY. IN OUR OPINION, WHETHER SUCH SET OFF IS LEGALLY VALID OR NOT IS ITA NO.319/PN/2010 (ASSESSMENT YEAR: 2006-07) ZAL SAM COOPER ALREADY DECIDED AGAINST THE ASSESSEE IN VIEW OF THE EXPRESS PROVISIONS OF THE SAID SUBSECTION (2A) OF SECTION 71, WHICH READS AS UNDER. 2(A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-S. (1) OR SUB-S. (2), WHERE IN RESPECT OF ANY ASSESSMENT YEAR, THE NET RE SULT OF THE COMPUTATION UNDER THE HEAD PROFITS AND GAINS OF BU SINESS OR PROFESSION IS A LOSS AND THE ASSESSEE HAS INCOME A SSESSABLE UNDER THE HEAD SALARIES, THE ASSESSEE SHALL NOT BE ENTI TLED TO HAVE SUCH LOSS SET OFF AGAINST SUCH INCOME. 4. FURTHER, WE HAVE ALSO PERUSED THE DECISION IN TH E CASE OF CHANDRAKUMAR (SUPRA) AND RELEVANT CONCLUSION IN THIS REGARD IS AS UNDER. UNABSORBED DEPRECIATION IS TO BE CONSIDERED AS FA LLING UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, AND THEREFORE SET OFF OF SUCH UNABSORBED DEPRECIATION OF EARLIER YEARS CANNOT BE MADE AGAINST INCOME ASSESSABLE UNDER THE HEAD SALARY. 5. FROM THE ABOVE PROVISIONS AS WELL AS THE PRECEDE NT MENTIONED ABOVE, IT IS CLEAR THAT THE UNABSORBED DEPRECIATION COMP UTED UNDER THE HEADS OF BUSINESS AND PROFESSION SHALL NOT BE ELIGIBLE FOR SET OFF AGAINST THE INCOME TAXABLE UNDER THE HEAD OF SALARY. WHEN THIS IS A LA W, THE CLAIM OF THE ASSESSEE IS PATENTLY ILLEGAL, ERRONEOUS AND UNSUSTAINABLE LE GALLY. THEREFORE, WE ARE OF THE OPINION THAT THE INCOME-TAX AUTHORITIES HAVE RI GHTLY REJECTED THE CLAIM OF THE ASSESSEE. THUS, THE GROUNDS RAISED IN THE APPEA L ARE DISMISSED . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 05-10-2 011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (D.KARUN AKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 05-10-2011 ASHWINI COPY TO:- 1) ASSESSEE 2) THE A.C.I.T. SATARA CIRCLE, SATARA 3) THE CIT(A) III, PUNE 4) THE CIT CONCERNED 5) THE DEPARTMENTAL REPRESENTATIVE, A BENCH, I.T .A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., PUNE